Quest 49. You are assigned as the project manager to a project which had a one-time cost variance in the past caused by unexpected rework which has meanwhile been finished. You perform earned value analysis and get the following results:

When calculating EAC values, the cumulative CPI and SPI values are typically used. While EVM data quickly provide many statistical EACs, only three of the more common methods :

1. EAC forecast for ETC work performed at the budgeted rate: This EAC method accepts the actual project performance to date (whether favorable or unfavorable) as represented by the actual costs, and predicts that all future ETC work will be accomplished at the budgeted rate. When actual performance is unfavorable, the assumption that future performance will improve should be accepted only when supported by project risk analysis. EAC = AC + (BAC – EV)

2. EAC forecast for ETC work performed at the present CPI: This method assumes what the project has experienced to date can be expected to continue in the future. The ETC work is assumed to be performed at the same cumulative cost performance index (CPI) as that incurred by the project to date. EAC = BAC / CPI

Please, can you explain why formula 1 was chosen instead of formula 2?I can see that the question highlights that there was a one-time cost variance, but an explanation as to the significance will be most helpful.Thank you.

Formula 1 is choosen because the question says "cost variance in the past caused by unexpected rework " and formula 2 is choosen assuming what the project has experienced to date can be expected to continue in the future

2. EAC forecast for ETC work performed at the present CPI: This method assumes what the project has experienced to date can be expected to continue in the future.